"Expansion of palm oil plantations will not be allowed to sacrifice natural forests," Witoelar said in an interview yesterday. "They will be planted in lots that are already empty. There are plenty of these, 18 million hectares of them."

While Witoelar's remarks may seem encouraging to green groups, the Indonesian government has a poor track record of enforcing its regulations at the local level. District and regional governments often ignore federal government pronouncements while corruption can undermine law enforcement efforts.

Indonesia is expected to surpass Malaysia as the world largest producer of palm oil this year. The government hopes to add 7 million hectares of plantations by 2011.

Environmentalists say oil palm plantations are destroying virgin rainforest and producing large-scale emissions of greenhouse gases. A study by Wetlands International found that the country is the third largest emitter of climate warming gases, about 85 percent of which result from deforestation and land use change, especially peatlands degradation. Indonesia's carbon dioxide emissions are rising at 4 percent annually, faster than India and China, according to a World Bank report released today. The report warned that Indonesia is at particular risk from the effects of global warming.

"Indonesia stands to experience significant losses with climate change," stated the report. "Being an archipelago, Indonesia is very vulnerable to the impacts of climate change. Prolonged droughts, increased frequency in extreme weather events, and heavy rainfall leading to big floods, are a few examples of the impacts of climate change... Indonesia's rich biodiversity is also at risk. In turn, this may lead to harmful effects on agriculture, fishery, and forestry, resulting in threats to food security and livelihoods."

Palm oil in Indonesia

Chart showing annual palm oil production by Malaysia and Indonesia from 1964-2006. Click to enlarge.

Between 1964 and 2006 Indonesian oil palm production has increased from 157,000 metric tons to 15.9 million metric tons while exports have jumped from 126,000 metric tons to 11.6 million metric tons. In Indonesian Borneo, Kalimantan, oil palm plantations have expanded from 13,140 hectares in 1984 to nearly one million hectares at the end of 2003. Overall, oil palm cultivation has expanded in Indonesia from 600,000 hectares in 1985 to more than 6 million hectares by early 2007, and is expected to reach 10 million hectares by 2010.

Palm oil is derived from the plant's fruit, which grow in clusters that may weigh 40-50 kilograms. A hundred kilograms of oil seeds typically produce 20 kilograms of oil, while a single hectare of oil palm may yield 5,000 kilograms of crude oil, or nearly 6,000 liters of crude oil that can be used in biodiesel production. At $400 per metric ton, or about $54 per barrel, palm oil is competitive with conventional oil. In the future, palm oil prices are expected to fall further as more oil palm comes under cultivation.

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